Business this week

If you can't beat 'em, join 'em

The New York Stock Exchange said that it was joining forces with Archipelago, an electronic exchange. If the deal goes through, the new company, of which the NYSE's owners will have 70%, will be a listed, for-profit entity, ending its mutual status.

The world's biggest carmaker, General Motors, lost $1.1 billion in the quarter, its worst quarterly loss since 1992. It also abandoned its profit forecast for the year. Ford Motor said quarterly net income fell by 38% to $1.21 billion.

Pfizer, the world's largest drug maker, said quarterly earnings dropped by 87% to $301m, due to a tax charge and costs to suspend sales of a drug. Meanwhile, Eli Lilly reported an 84% increase, earning $737m. Johnson & Johnson announced record profits and sales, and Roche Holding posted a 14% jump in quarterly revenue.

America's Supreme Court heard arguments this week in a case between Merck, a German drug firm unrelated to the American company, and Integra LifeSciences, a medical device firm, over the leeway researchers have to use technologies without infringing patents.

Time Warner and Comcast, America's two biggest cable-television firms, agreed to buy their fifth-largest rival, bankrupt Adelphia Communications, for $17.6 billion. Their offer beat a last-minute bid from Cablevision, a smaller cable-TV company.

Viacom said quarterly profit fell by almost 18% to $585m on lower revenue at its CBS television unit, but the company cited a 19% revenue gain in its cable networks division. Viacom reiterated it is considering a breakup into a broadcast-TV entity and cable units.

Adobe Systems said it will acquire Macromedia for $3.4 billion in stock, a deal that unites two of the largest digital document and online publishing firms. Adobe's PDF format is a standard for documents on computers, and Macromedia makes “flash” animation for web pages.

Looking chipper

The chipmaker Intel said quarterly profits rose by around 25% to $2.15 billion on revenue of $9.4 billion, a sign of increased demand for higher-end computers. The firm also raised its profit-margin expectations.

Ebay's first-quarter profits rose 28% to $256m on revenue of $1 billion on strong international sales, which may soon surpass those in America.

Conrad Black resigned as boss of Ravelston, a private firm through which he ran his media empire until a revolt in one part of it, Hollinger International, by minority shareholders. Ravelston is seeking bankruptcy protection.

US Airways is reportedly in merger talks with America West to create a national low-cost airline. A merger could be the first step in airline-industry consolidation. Continental Air's quarterly loss widened to $184m due to fuel costs and competition.

Royal Dutch/Shell Group is selling its interest in the power-plant InterGen for $1.75 billion to the private-equity arms of American International Group and the Ontario Teachers' Pension Plan.

J.P. Morgan Chase's net income rose by 17% to $2.26 billion and revenue increased by 51% in the quarter boosted by its acquisition of Bank One. Bank of America hit record quarterly earnings of $4.7 billion, up by 75%, thanks in part to its acquisition of FleetBoston as well as trading gains.

Hope springs eternal

RAG, a German mining conglomerate, applied to open a coal mine in North Rhine-Westphalia that would create 2,500 jobs and produce 3m tonnes a year. Some believe the plan is motivated by state elections in May, because by most estimates it costs more to produce coal in Germany than its market value.

China's gross domestic product grew by 9.5% in the quarter compared to a year earlier, fuelled by surging domestic demand. Among the gains was a 22.8% growth in investment in fixed assets.

Up and down

America's consumer price index jumped by a larger-than-expected 0.6% in March, increasing worries about inflation. The gain, the largest in five months, suggests companies are passing along higher costs of energy and other commodities.